BAK

JF-Expert Member

THE government admitted for the first time yesterday that it erred in selling a prime piece of land in Dar es Salaam earlier this year for a ridiculously cheap price.

''It is true that the 440m/- price tag was quite low compared to the actual value of the plot,'' the Minister for Planning, Economy and Empowerment, Dr Juma Ngasongwa, told THISDAY.

He made the remarks in an interview with THISDAY in Dar es Salaam after being asked to explain circumstances behind the government's bizarre decision of selling a prime property valued at 1.85bn/- for just 440m/-.

The plot, number 162/38 at the junction of Mirambo Street and Samora Avenue in the city's central business district, was sold by the Parastatal Sector Reform Commission (PSRC) to El-Hillal Minerals (Tanzania) Limited in May this year.

Following an outrage over the questionable deal, the PSRC was forced to revise the price tag upwards and demand an extra payment of 1.41bn/- from the buyer to match the final purchase price with the property's stated market value of 1.85bn/-.

However, apart from admitting that the initial 440m/- price tag was flawed, Ngasongwa defended the government's decision to sell the property at the new price of 1.85bn/- despite criticism that proper procedure and due process were not followed in the transaction.

''I am happy that the PSRC has corrected the unfortunate mistake over the price of the plot and is now demanding payment of an amount equal to the market value of the property,'' he said.

Ngasongwa noted that despite the initial error of selling the property cheaply, the government still made the right decision in selling the plot to El-Hillal Minerals for the development of a proposed international diamond auction market in Dar es Salaam.

Once fully operational, the proposed global diamond auction to be based in the city would give small-scale diamond miners in Tanzania better prices for their gemstones and significantly boost government revenue, he said.

''The world trade diamond centre that the investor, El-Hillal Minerals, plans to develop will be of great benefit to the nation not only as a source of revenue, but also as a vital tool for job creation,'' he explained.

Asked why there was no public tender for the sale of the plot, he dismissed suggestions that the government could have earned even more than the 1.85bn/- if a competitive bidding process was followed.

The PSRC recently came out of its shell and sought to explain its earlier decision of selling the property to the private developer at a throw-away price.

As already reported by THISDAY in a series of investigative reports, Prime Minister Edward Lowassa met with the owner of El-Hillal Minerals, Hillal Hamad Hillal, sometime last year where the businessman is understood to have informed the PM about his intention to buy the expensive government property for just 440m/-.

After the meeting, Premier Lowassa officially directed the PSRC to ''assist'' Hillal as per existing laws and regulations after his previous attempts to buy the plot had come to nought.

In a public statement issued by his spokesman, the PSRC executive chairman, Ali Karavina, announced that El-Hillal Minerals had been given until the end of this month to pay the additional 1.41bn/- for the plot, short of which the government would repossess the property.

The sale of the property ruffled some angry feathers in government with many officials arguing that the plot should have been used to construct a multi-storeyed office accommodation building to house government ministries and agencies.

The Treasury currently pays billions of shillings to private landlords each month from taxpayers' money for the accommodation of government offices.

Kasheshe

JF-Expert Member

Kasheshe

JF-Expert Member

I did said before, improvement in communication sector in terms of infrastructure and easier dissiminating of news/information will help Tanzanian a lot?

No doubt this issue was among the order of the day issues in those days;;; but for now now, it is just a history, those who believe they can still continue doing these mauza uza, they are lieing to themselves.

THISDAY REPORTER
Dar es Salaam
THE private businessman behind the purchase of a prime piece of government property in Dar es Salaam earlier this year for a ridiculously cheap price has declined to comment on the hugely controversial transaction.

''I have nothing to say, since you have already written extensively about this matter in your newspaper,'' said Hillal Hamad Hillal, owner of El-Hillal Minerals (Tanzania) Limited, when sought out yesterday by THISDAY for his take on the tough new conditions given to him by the government for the deal to be finalised.

Hillal, who was recently elected to the ruling Chama Cha Mapinduzi's national executive committee (NEC) representing Shinyanga Region, had initially offered to buy the government land on plot number 162/38 at the junction of Mirambo Street and Samora Avenue in the city?s central business district for just 440m/-.

Surprisingly, the government accepted the exceedingly low offer for the property, made through the El-Hillal Minerals (Tanzania) Limited company and without following the government's own procedures and regulations which prohibit state-owned property from being sold to private companies unless by competitive tender bidding process or public auction.

El-Hillal Minerals paid just 440m/- for the property despite a valuation report commissioned by the Presidential Parastatal Sector Reform Commission (PSRC) just weeks before the sale putting the actual market value of the plot at 1.85bn/-.

Independent real estate experts interviewed by THISDAY said even the 1.85bn/- price tag was a conservative estimate of the property value, suggesting that the plot could fetch up to 5bn/- through a truly competitive public tender bidding process.

The government finally conceded last week that the PSRC had made a mistake in initially selling the property for just 440m/- to El-Hillal Minerals. According to the Minister for Planning, Economy and Empowerment, Dr Juma Ngasongwa, the buyer has now been instructed to pay the full amount of 1.85bn/-.

Following a series of investigative stories published by THISDAY on the clearly-dubious deal, the price tag has now been revised upwards and El-Hillal Minerals ordered to pay the extra 1.41bn/- for the plot, being the difference between the initial price and the real valuation.

Ngasongwa contended that despite the initial error of selling the property cheaply, the government was right to sell the plot to El-Hillal Minerals, since the company would develop a key project likely to create new jobs and significantly increase government revenue collection.

Among other things, the company has pledged to construct a 12-storeyed building that would house a proposed world diamond auction market and a bank of international repute in Dar es Salaam.

It is understood that Prime Minister Edward Lowassa met with El-Hillal Minerals owner Hillal Hamad Hillal sometime last year, and afterwards formally instructed the PSRC to ''assist'' Hillal as per existing laws and regulations after his previous attempts to buy the plot had come to nought.

In a recent public statement issued by his spokesman, PSRC executive chairman Ali Karavina announced that El-Hillal Minerals had been given until the end of this month to pay the additional amount of 1.41bn/- for the plot, short of which the government would repossess the property.

Several senior government officials are known to oppose the sale of the property on the argument that the state should use the land to construct its own building to house offices for various ministries and government agencies, hence saving the Treasury from paying billions of extra shillings to private landlords every month.

Article yenyewe ni:Private buyer in prime government plot deal says: No hanky-panky involved at all

THISDAY REPORTER
Dar es Salaam

A LOCAL businessman behind the purchase of a prime government plot in the Dar es Salaam city centre, Hillal Hamad Hillal, has finally stepped forward to explain the controversy behind the deal, saying there was no hanky-panky involved in the transaction.

This was a clean deal, which followed all government laws and regulations. There was absolutely no corruption or any wrongdoing involved, he declared yesterday in an interview with THISDAY in the city.

He said the government had initially agreed to sell the expensive real estate property to his company, El-Hillal Minerals (Tanzania) Limited, for 440m/- on the understanding that it would be allocated at least 1,300 square metres of office space, free of charge, for five full years after completion of the construction of a high-rise building on the property.

The plot in question with registration number 162/38, situated at the junction of Mirambo Street and Samora Avenue in the citys central business district, is currently being used as a temporary parking lot for employees of the Bank of Tanzania (BoT).

Hillal however, admitted that, following complaints highlighted in a series of THISDAY reports to the effect that the government had sold the property far too cheaply, terms of the sale agreement were abruptly changed.
He said the now defunct Presidential Parastatal Sector Reform Commission (PSRC) had originally signed a sale agreement with his company on May 14 last year, in which he was to pay 440m/- cash and provide the government with rent-free office accommodation for five years as part of the deal.

But on September 24, PSRC Executive Chairman Ali Karavina informed Hillal by letter of the changes to the sale agreement, where he would now be required to pay up an extra 1.41bn/- in addition to the 440m/- that had already been paid.

He said he was told this would increase the sale price to 1.85bn/-, which was the true value of the property according to a valuation earlier commissioned by the same PSRC.

Hillal told THISDAY that although he was initially required to pay the outstanding balance by October 4 last year - and later given a deadline extension to December 31 - he asked for more time to pay the extra 1.41bn/- because of the short notice he had been given about the new conditions.

The government agreed to my request, and we assigned Addendum Number 1to the May 14, 2007 sale agreement on December 21, 2007, he said.

The addendum signed by Karavina and Hillal effectively extended the deadline for the property buyer to pay the remaining 1.41bn/- to June 30, 2009.

Hillal said since PSRC legally ceased to exist on December 31 last year, he would now be sending pay cheques to the state-run Consolidated Holding Corporation, which has taken over remaining operations of the defunct privatisation agency.

He reiterated that the transaction as a whole was completely above board, explaining that the initial 440m/- price tag plus the approximately $1.56m (around 1.8bn/-) worth of rent that the government would have been provided free of charge for five years was fair compensation for the currently-barren plot.

I would like to reiterate that this transaction was approved by all relevant government authorities and followed all procedures, said Hillal, who is proprietor of El-Hillal Minerals (Tanzania) Limited.

The company runs a diamond mine in Shinyanga Region, near the Mwadui-based Williamson Diamond Mine owned by South Africas giant De Beers company.

Hillal confirmed the companys plans to build an international market for raw diamonds on the Dar es Salaam plot in question. My intention is to develop a high-rise building with 12 floors of office accommodation, he said.

Apart from a diamond auction market, I have also reached an agreement with a highly-reputable international bank to open its branch in the same building,he added.

He said design work is already underway for the planned construction project, which is expected to cost in the region of $12m (approx. 15.6bn/-) in total. The construction work itself will commence once the company has received all necessary permits from the government and city council, Hillal explained.

RR

JF-Expert Member

RR

JF-Expert Member

You pay 440m to GoT, take some 500m to distribute among the government official responsible for the deal (valuers and decision makers), and you have the property for less than half the price. teh teh teh.